Sales gains in 2007 topped off five years of prosperity for North American automation products suppliers. That’s one conclusion to be drawn from the results of a recent survey of member companies by the Measurement, Control & Automation Association (MCAA).
The MCAA 2008 Operating Benchmarks Report shows that 2007 revenues were up by anywhere from 4.2 percent to 16.3 percent over 2006 for the 48 MCAA member companies that provided data for the report. An additional section based on available data from 15 public companies—not all of which are MCAA members—showed 2007 revenue gains of more than 20 percent.
The MCCA, based in Williamsburg, Va., is a trade association for North American manufacturers and distributors of instrumentation, systems and software used in industrial process control and factory automation. Each year, the association collects information on the operating performance of its member companies on a confidential basis, and aggregates the data into a report. Data is arrayed in groups by sales volume size to make comparative analysis more focused.
Over the five year period covered by the 2008 report—from 2003 through 2007—“revenue growth was substantial, as was the resulting income from operations,” according to a recent MCAA press release. A significant factor in the improvement in operating income is an across-the-board management of selling, and general and administrative expenses, the MCAA said. The larger companies have the most leverage to accomplish this, but even the smaller companies appear to have found means to contain these costs and thus improve their margins.
More, yet less.
Having noted in past years a decline in the investment in research and development (R&D), particularly by the larger companies in the report, the MCCA noted this year that the largest companies increased R&D spending by 30 percent in absolute dollars, while still showing a decline as a percent of sales. This is likely attributable to a conscious program of acquiring R&D by these larger companies, said the MCAA. The other categories of companies (smaller firms) continued their investment—typically about 5 percent of sales.
The annual Operating Benchmarks Report survey is fielded in January and the final report published in early May. The full report is only available to participating MCAA member companies.
Measurement, Control & Automation Association